Annual production capacity must follow furnace capacity, not sanctioned electricity load, for induction furnace assessment.

Annual production capacity of an induction furnace is to be determined on the furnace capacity and relevant material under Rule 3 of the Induction Furnace Annual Capacity Determination Rules, 1997; sanctioned electricity load is not the statutory basis for reducing capacity. As the assessee had admitted 3.2 MT capacity in correspondence and supporting documents, the plea for re-fixation at 2.6 MT on the basis of 1300 KW load was rejected. A request for remand and fresh measurement was also declined because no genuine dispute on furnace capacity remained.

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Issues: Whether the annual production capacity of the induction furnace unit was correctly determined at 3.2 MT and whether the sanctioned electricity load of 1300 KW could justify re-determination of the capacity at 2.6 MT.

Analysis: The capacity of the furnace had been admitted by the appellants in their correspondence and was also reflected in the supplier's invoice and the Chartered Engineer's certificate. Under Rule 3 of the Induction Furnace Annual Capacity Determination Rules, 1997, capacity is to be ascertained on the basis of the furnace capacity and other relevant material, and the sanctioned electricity load is not the statutory basis for fixing annual production capacity. Since the appellants did not dispute that the furnace capacity was 3.2 MT, the plea that lower sanctioned load reduced the assessable capacity was rejected. The request for remand for fresh measurement was also declined because no genuine dispute as to furnace capacity survived.

Conclusion: The determination of annual production capacity at 3.2 MT was upheld, and the assessee's challenge for fixation at 2.6 MT failed.

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